True or false: the shape of the production function reflects the law of diminishing marginal returns. true false
True Explanation: The slope of the production function measures the change in output for each additional unit of input (the marginal return). It can be observed that the production function becomes flatter as more number of input is added. This exhibits the property of diminishing marginal return where at some point, adding an additional factor of production results in smaller increases in output. At this point, the effectiveness of each additional unit of input decreases.
True Explanation: When we graph a production function, we obtain an upward-sloping curve whose gradient (or slope) reaches a peak, and then, begans to flatten until it is fully flat. This is because the law of diminishing returns states that there is a point when capital and labor are used optimally, and after that point, any additonal unit of capital or labor has a lower marginal productivity. I will attach a graph of the production function that illustrates this point.
- When writing, you can most effectively use a dash to - January 27, 2023
- Does anyone know if comedian Ron White has died? - January 26, 2023
- Which statement best explains the situational irony that occurs in the passage? - January 26, 2023